SANTA FE - New Mexico state employees would gain access to short-term personal loans that can be repaid through their paychecks, under newly proposed legislation.

Democratic state Sen. Bill Tallman, of Albuquerque, said Monday that the bill is designed to ensure state employees can borrow modest amounts of money without resorting to high-interest loans from storefront lenders.

New Mexico this year is capping annual interest rates on small loans at 175 percent in an effort to combat predatory lending. Consumer advocates say that limit still is too high and are promoting new lending alternatives for individuals and households that don't have access to traditional bank loans.

Tallman's proposal would limit interest rates to 30 percent for qualified state employees, and cap repayment at 12 percent of gross salary or wages. He said the goal is to lower costs and debt burdens on state workers.

"It's a nice benefit we can give to state employees," said Tallman, who previously worked as a city manager of several mid-sized municipalities outside New Mexico.

Several local government entities in New Mexico, from the City of Las Cruces to Santa Fe Public Schools, already have joined a program called TrueConnect that provides employees with short-term loans that are repaid from a portion of salary.

Santa Fe Public Schools offers its employees loans through TrueConnect of between $1,000 and $3,000, district spokesman Jeff Gephart said. He said the district does not make any money off the loans, while paying its own administrative expenses.

Tallman's bill would direct the New Mexico Department of Finance and Administration to devise a loan program. New Mexico state government employs nearly 20,000 people.